Currency Analyst since 2010

The event of the week: NFP

EUR/USD is little changed in the $1.3570 area. The market players are waiting for the release of US Non-Farm Payrolls at 13:30 GMT (forecast: 180K; previous: 204K).

This release is perceived as crucial for the FOMC monetary policy decision on Dec. 18-19. A reading higher than 200K will increase the possibility the Fed’s QE tapering this month, while a result under 150K would diminish the risk.

Analysts at AMP Capital point out that the situation’s quite uncertain: it’s 50/50 as to whether the Fed will move in December or decide to wait a bit longer before reducing monetary stimulus. American GDP data released yesterday doesn’t make the situation clearer: although US economic growth was revised up from 2.8% to 3.6%, all the increase came in a buildup of inventories. As a result, analysts think that inventories would be run down in Q4 and this will have negative impact on growth. Westpac even sees the chance of contraction.

US 10-year US Treasury yields are at the highest level since Sept. at 2.86%.

You still have a chance to participate in 'Predict NFP' contest run by FBS and win a wonderful T-shirt: http://www.fbs.com/news/2013-12-02/23913-predict-nfp-november-2013

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